SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                    FORM 10-Q

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


     For the Quarter Ended September 30, 2007. Commission File Number 1-9720

                                       OR
               [ ] TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


             For the Transition Period From __________ to __________
                        Commission File Number __________

                           PAR TECHNOLOGY CORPORATION
             (Exact name of registrant as specified in its charter)

           Delaware                                       16-1434688
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)


PAR Technology Park
8383 Seneca Turnpike
New Hartford, NY                                          13413-4991
(Address of principal executive offices)                  (Zip Code)


     Registrant's telephone number, including area code: (315) 738-0600

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]


     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the Exchange  Act.  (Check
one):Large Accelerated Filer [ ] Accelerated Filer [X] Non-Accelerated Filer [ ]


     Indicate  by check mark  whether  the  registrant  is a shell  company  (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ]  No [X]

     The  number of shares  outstanding  of  registrant's  common  stock,  as of
October 31, 2007 - 14,379,330 shares.



<PAGE>



                           PAR TECHNOLOGY CORPORATION


                                TABLE OF CONTENTS
                                    FORM 10-Q


                                     PART I
                              FINANCIAL INFORMATION


   Item Number
   -----------

      Item 1.    Financial Statements (unaudited)
                 -  Consolidated Statements of Operations for the three and nine
                    months ended September 30, 2007 and 2006

                 -  Consolidated Statements of Comprehensive Income (Loss)for
                    the three and nine months ended September 30, 2007 and 2006

                 -  Consolidated Balance Sheets at September 30, 2007 and
                    December 31, 2006

                 -  Consolidated Statements of Cash Flows
                    for the nine months ended September 30, 2007 and 2006

                 -  Notes to Unaudited Interim Consolidated Financial Statements

      Item 2.    Management's Discussion and Analysis of Financial Condition and
                 Results of Operations

      Item 3.    Quantitative and Qualitative Disclosures About Market Risk

      Item 4.    Controls and Procedures

                                     PART II
                                OTHER INFORMATION



      Item 1A.   Risk Factors

      Item 4.    Submission of Matters to a Vote of Security Holders

      Item 5.    Other Information

      Item 6.    Exhibits

      Signatures

      Exhibit Index


<PAGE>
                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements
<TABLE>
<CAPTION>

                   PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)
                                   (unaudited)

                                                       For the three months      For the nine months
                                                        ended September 30,       ended September 30,
                                                      ----------------------    ----------------------
                                                         2007         2006         2007         2006
                                                      ---------    ---------    ---------    ---------
<S>                                                   <C>          <C>          <C>          <C>
Net revenues:
     Product ......................................   $  18,066    $  17,975    $  53,092    $  63,705
     Service ......................................      17,006       15,092       48,635       43,723
     Contract .....................................      16,505       15,467       47,558       47,046
                                                      ---------    ---------    ---------    ---------
                                                         51,577       48,534      149,285      154,474
                                                      ---------    ---------    ---------    ---------
Costs of sales:
     Product ......................................      10,681       10,370       31,688       36,242
     Service ......................................      13,238       11,387       37,290       32,937
     Contract .....................................      15,256       14,600       44,462       43,844
                                                      ---------    ---------    ---------    ---------
                                                         39,175       36,357      113,440      113,023
                                                      ---------    ---------    ---------    ---------

     Gross margin .................................      12,402       12,177       35,845       41,451
                                                      ---------    ---------    ---------    ---------
Operating expenses:
     Selling, general and administrative ..........       8,581        8,241       26,476       24,510
     Research and development .....................       4,562        2,613       12,763        8,348
     Amortization of identifiable intangible assets         397          307        1,181          922
                                                      ---------    ---------    ---------    ---------
                                                         13,540       11,161       40,420       33,780
                                                      ---------    ---------    ---------    ---------

Operating income (loss) ...........................      (1,138)       1,016       (4,575)       7,671
Other income, net .................................         350           62          744          437
Interest expense ..................................        (310)        (206)        (769)        (458)
                                                      ---------    ---------    ---------    ---------
Income (loss) before provision for income taxes ...      (1,098)         872       (4,600)       7,650
Benefit (provision) for income taxes ..............         236         (322)       1,409       (2,750)
                                                      ---------    ---------    ---------    ---------
Net income (loss) .................................   $    (862)   $     550    $  (3,191)   $   4,900
                                                      =========    =========    =========    =========
Earnings (loss) per share

     Basic ........................................   $    (.06)   $     .04    $    (.22)   $     .35

     Diluted ......................................   $    (.06)   $     .04    $    (.22)   $     .33
Weighted average shares outstanding

     Basic ........................................      14,351       14,181       14,340       14,168
                                                      =========    =========    =========    =========
     Diluted ......................................      14,351       14,646       14,340       14,751
                                                      =========    =========    =========    =========
</TABLE>


See notes to unaudited interim consolidated financial statements


<PAGE>




                   PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                                 (in thousands)
                                   (unaudited)
                                    <TABLE>
<CAPTION>


                                                       For the three months      For the nine months
                                                        ended September 30,       ended September 30,
                                                      ----------------------    ----------------------
                                                         2007         2006         2007         2006
                                                      ---------    ---------    ---------    ---------
<S>                                                   <C>          <C>          <C>          <C>
Net income (loss) .................................   $    (862)   $     550    $  (3,191)   $   4,900

Other comprehensive income, net of tax:

     Foreign currency translation adjustments .....         505           62        1,034          183
                                                      ---------    ---------    ---------    ---------

Comprehensive income (loss) .......................   $    (357)   $     612    $  (2,157)   $   5,083
                                                      =========    =========    =========    =========

</TABLE>






See notes to unaudited interim consolidated financial statements


<PAGE>


                   PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      (in thousands, except share amounts)
                                   (unaudited)

                                                    September 30, December 31,
                                                        2007          2006
                                                    ------------- ------------
Assets
Current assets:
     Cash and cash equivalents ...................   $   4,506    $   4,273
     Accounts receivable-net .....................      39,398       46,791
     Inventories-net .............................      38,282       35,948
     Income tax refunds ..........................         983        1,103
     Deferred income taxes .......................       6,355        5,139
     Other current assets ........................       3,328        2,737
                                                     ---------    ---------
          Total current assets ...................      92,852       95,991
Property, plant and equipment - net ..............       7,215        7,535
Goodwill .........................................      26,767       25,734
Intangible assets - net ..........................      10,163       10,695
Other assets .....................................       3,526        2,841
                                                     ---------    ---------
                                                     $ 140,523    $ 142,796
                                                     =========    =========
Liabilities and Shareholders' Equity
Current liabilities:
     Current portion of long-term debt ...........   $     694    $     240
     Borrowings under lines of credit ............       5,421        7,713
     Accounts payable ............................      11,463       12,470
     Accrued salaries and benefits ...............       7,820        8,279
     Accrued expenses ............................       2,791        1,861
     Customer deposits ...........................       4,589        3,656
     Deferred service revenue ....................      12,413       12,254
                                                     ---------    ---------
         Total current liabilities ...............      45,191       46,473
                                                     ---------    ---------
Long-term debt ...................................       7,182        7,708
                                                     ---------    ---------
Deferred income taxes ............................         899          653
                                                     ---------    ---------
Other long-term liabilities ......................       2,878        1,879
                                                     ---------    ---------
Shareholders' Equity:
     Preferred stock, $.02 par value,
       1,000,000 shares authorized ...............        --           --
     Common stock, $.02 par value,
       29,000,000 shares authorized;
       16,031,035 and 15,980,486 shares issued;
        14,378,280 and 14,327,731outstanding .....         321          320
     Capital in excess of par value ..............      39,048       38,602
     Retained earnings ...........................      49,968       53,159
     Accumulated other comprehensive income (loss)         545         (489)
     Treasury stock, at cost, 1,652,755 shares ...      (5,509)      (5,509)
                                                     ---------    ---------
         Total shareholders' equity ..............      84,373       86,083
                                                     ---------    ---------
                                                     $ 140,523    $ 142,796
                                                     =========    =========


See notes to unaudited interim consolidated financial statements
<PAGE>

<TABLE>
<CAPTION>

                   PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

                                                                                For the nine months
                                                                                 ended September 30,
                                                                                 -------------------
                                                                                   2007       2006
                                                                                 -------    -------
<S>                                                                              <C>        <C>
Cash flows from operating activities:
    Net income (loss) ........................................................   $(3,191)   $ 4,900
    Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
         Depreciation and amortization .......................................     2,915      2,858
         Provision for bad debts .............................................     1,395        363
         Provision for obsolete inventory ....................................     1,998      1,193
         Equity based compensation ...........................................       328        200
         Deferred income tax .................................................    (1,577)     1,675
         Changes in operating assets and liabilities:
             Accounts receivable .............................................     5,998     (7,482)
             Inventories .....................................................    (4,332)    (6,470)
             Income tax refunds ..............................................       120     (1,474)
             Other current assets ............................................      (591)      (594)
             Other assets ....................................................      (685)      (608)
             Accounts payable ................................................    (1,034)       210
             Accrued salaries and benefits ...................................      (459)    (2,363)
             Accrued expenses ................................................       930       (349)
             Customer deposits ...............................................       933       (428)
             Deferred service revenue ........................................       159       (716)
             Other long-term liabilities .....................................       999        802
                                                                                 -------    -------
               Net cash provided by (used in) operating activities ...........     3,906     (8,283)
                                                                                 -------    -------
Cash flows from investing activities:
    Capital expenditures .....................................................    (1,049)      (962)
    Capitalization of software costs .........................................      (788)      (399)
                                                                                 -------    -------
               Net cash used in investing activities .........................    (1,837)    (1,361)
                                                                                 -------    -------
Cash flows from financing activities:
    Net borrowings (payments) under line-of-credit agreements ................    (2,292)     6,399
    Payments of long-term debt ...............................................       (72)        (6)
    Proceeds from the exercise of stock options ..............................       119        160
    Excess tax benefit of stock option exercises .............................      --          169
    Cash dividend in lieu of fractional shares on stock split ................      --           (4)
                                                                                 -------    -------
               Net cash provided by (used in) financing activities ...........    (2,245)     6,718
                                                                                 -------    -------
Effect of exchange rate changes on cash and cash equivalents .................       409         42
                                                                                 -------    -------
Net increase (decrease) in cash and cash equivalents .........................       233     (2,884)
Cash and cash equivalents at beginning of period .............................     4,273      4,982
                                                                                 -------    -------
Cash and cash equivalents at end of period ...................................   $ 4,506    $ 2,098
                                                                                 =======    =======

Supplemental disclosures of cash flow information:
Cash paid during the period for:
    Interest .................................................................   $   725    $   426
    Income taxes, net of refunds .............................................      (145)     2,316


See notes to unaudited interim consolidated financial statements
</TABLE>


<PAGE>


                   PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS


1.   The accompanying  unaudited interim consolidated  financial statements have
     been prepared by PAR  Technology  Corporation  (the  "Company" or "PAR") in
     accordance with U.S. generally accepted  accounting  principles for interim
     financial  statements and with the instructions to Form 10-Q and Regulation
     S-X pertaining to interim financial statements.  Accordingly, these interim
     financial  statements do not include all information and footnotes required
     by U.S.  generally  accepted  accounting  principles for complete financial
     statements.  In the  opinion  of the  Company,  such  unaudited  statements
     include all  adjustments  (which comprise only normal  recurring  accruals)
     necessary  for a fair  presentation  of the results for such  periods.  The
     results of  operations  for the three and nine months ended  September  30,
     2007 are not  necessarily  indicative  of the results of  operations  to be
     expected for any future period. The consolidated  financial  statements and
     notes thereto should be read in conjunction  with the audited  consolidated
     financial  statements  and  notes  for the year  ended  December  31,  2006
     included in the Company's December 31, 2006 Annual Report to the Securities
     and Exchange Commission on Form 10-K.

     The preparation of consolidated financial statements requires management of
     the Company to make a number of estimates and  assumptions  relating to the
     reported amounts of assets and liabilities and the disclosure of contingent
     assets and liabilities at the date of the consolidated financial statements
     and the  reported  amounts of  revenues  and  expenses  during the  period.
     Significant  items subject to such estimates and assumptions  include:  the
     carrying amount of property,  plant and equipment,  identifiable intangible
     assets and goodwill, equity based compensation and valuation allowances for
     receivables,  inventories and deferred  income taxes.  Actual results could
     differ from those estimates.

2.   On November 2, 2006, PAR  Technology  Corporation  (the  "Company") and its
     wholly owned  subsidiary,  Par-Siva  Corporation  (f/k/a PAR Vision Systems
     Corporation) (the  "Subsidiary")  acquired  substantially all of the assets
     and assumed certain liabilities of SIVA Corporation ("SIVA").  The purchase
     price of the assets was  approximately  $6.9  million  including  estimated
     acquisition costs of approximately  $177,000.  The purchase price consisted
     of $1.1  million  worth of PAR common stock  (125,549  shares of PAR common
     stock issued out of treasury)  and the  remainder  in cash.  The  agreement
     provides for additional contingent purchase price payments based on certain
     sales based milestones and other  conditions.  SIVA, based in Delray Beach,
     Florida,  is a developer of software  solutions for  multi-unit  restaurant
     operations.

     On an unaudited  proforma  basis,  assuming the completed  acquisition  had
     occurred as of the  beginning of the periods  presented,  the  consolidated
     results of the Company would have been as follows (in thousands, except per
     share amounts):

                                For the three months       For the nine months
                              ended September 30, 2006  ended September 30, 2006
                              ------------------------  ------------------------

Net revenues ............            $    48,677              $   155,669
Net income (loss) .......            $      (245)             $     2,435

Earnings (loss) per share:
   Basic .................           $      (.02)             $       .17
   Diluted ...............           $      (.02)             $       .16

<PAGE>


     The unaudited proforma financial  information  presented above gives effect
     to purchase  accounting  adjustments which have resulted or are expected to
     result from the acquisition.  This proforma  information is not necessarily
     indicative  of the results that would  actually  have been obtained had the
     companies been combined for the periods presented.

3.   Inventories   are  primarily  used  in  the   manufacture  and  service  of
     Hospitality  products.  The  compo-nents  of  inventory,   net  of  related
     reserves, consist of the following:

                                                      (in thousands)
                                             September 30,         December 31,
                                                2007                  2006
                                             ----------            --------

           Finished goods ............       $   9,674             $  9,533
           Work in process ...........           2,056                1,667
           Component parts ...........           8,229                7,119
           Service parts .............          18,323               17,629
                                             ---------             --------
                                             $  38,282             $ 35,948
                                             =========             ========

     At  September  30, 2007 and  December  31,  2006,  the Company had recorded
     reserves for  shrinkage,  excess and obsolete  inventory of $4,963,000  and
     $3,658,000, respectively.

4.   Effective  January 1, 2006, the Company adopted the fair value  recognition
     provisions  of  Statement  of  Financial   Accounting  Standards  No.  123R
     Share-Based  Payment  (SFAS  123R) on a modified  prospective  basis.  This
     standard  requires  the Company to measure  the cost of  employee  services
     received in exchange  for equity  awards based on the grant date fair value
     of the awards.  The cost is  recognized  as  compensation  expense over the
     vesting  period of the  awards.  Total  compensation  expense  included  in
     operating  expenses for the three and nine months ended  September 30, 2007
     was $57,000 and $328,000, respectively. Total compensation expense included
     in operating  expenses for the three and nine months  ended  September  30,
     2006 was $62,000 and $200,000,  respectively.  At September  30, 2007,  the
     unrecognized  compensation  expense related to non-vested option awards was
     $660,000 (net of estimated forfeitures).

5.   Earnings per share are calculated in accordance with Statement of Financial
     Accounting  Standards  No. 128,  Earnings per Share,  which  specifies  the
     computation,  presentation  and  disclosure  requirements  for earnings per
     share (EPS).  It requires the  presentation of basic and diluted EPS. Basic
     EPS excludes all dilution and is based upon the weighted  average number of
     common  shares  outstanding  during the period.  Diluted EPS  reflects  the
     potential  dilution that would occur if  securities  or other  contracts to
     issue common stock were exercised or converted into common stock.

<PAGE>

     The  following  is  a   reconciliation   of  the  weighted  average  shares
     outstanding  for the basic and  diluted  EPS  computations  (in  thousands,
     except per share data):

                                                        For the three months
                                                         ended September 30,
                                                        --------------------
                                                          2007         2006
                                                        --------    --------

Net income (loss) ...................................   $   (862)   $    550
                                                        ========    ========
Basic:
     Shares outstanding at beginning of period ......     14,349      14,181
     Weighted average shares issued during the period          2        --
                                                        --------    --------
     Weighted average common shares, basic ..........     14,351      14,181
                                                        ========    ========
     Earnings (loss) per common share, basic ........   $   (.06)   $    .04
                                                        ========    ========
Diluted:
     Weighted average common shares, basic ..........     14,351      14,181
     Dilutive impact of stock options ...............       --           465
                                                        --------    --------
     Weighted average common shares, diluted ........     14,351      14,646
                                                        ========    ========
     Earnings (loss) per common share, diluted ......   $   (.06)   $    .04
                                                        ========    ========


                                                        For the nine months
                                                         ended September 30,
                                                        --------------------
                                                          2007         2006
                                                        --------    --------
Net income (loss) ...................................   $ (3,191)   $  4,900
                                                        ========    ========
Basic:
     Shares outstanding at beginning of period ......     14,310      14,137
     Weighted average shares issued during the period         30          31
                                                        --------    --------
     Weighted average common shares, basic ..........     14,340      14,168
                                                        ========    ========
     Earnings (loss) per common share, basic ........   $   (.22)   $    .35
                                                        ========    ========
Diluted:
     Weighted average common shares, basic ..........     14,340      14,168
     Dilutive impact of stock options ...............       --           583
                                                        --------    --------
     Weighted average common shares, diluted ........     14,340      14,751
                                                        ========    ========
     Earnings (loss) per common share, diluted ......   $   (.22)   $    .33
                                                        ========    ========


     For the three  and nine  months  ended  September  30,  2007,  418,016  and
     446,372,  respectively,  of incremental shares from the assumed exercise of
     stock  options and 23,594  restricted  stock awards are not included in the
     computation  of diluted  earnings  per share  because of the  anti-dilutive
     effect on earnings per share.

6.   The Company has adopted the  provisions of Financial  Accounting  Standards
     Board  Interpretation  No. 48,  Accounting for  Uncertainty in Income Taxes
     (FIN 48) effective  January 1, 2007.  The  Company's  adoption of FIN 48 on
     January  1,  2007,  did  not  have  a  material  impact  on  the  Company's
     consolidated financial position, results of operations or cash flows.

     As of  September  30,  2007  and  January  1,  2007,  the  Company  had  an
     insignificant amount of unrecognized tax benefits.  The Company's policy is
     to recognize  interest and penalties on unrecognized tax benefits in income
     tax expense in the  consolidated  statements of  operations.  The amount of
     interest and  penalties  for the nine months ended  September  30, 2007 was
     deemed  immaterial by the Company.  The Company or one of its  subsidiaries
     files income tax returns in the U.S. federal jurisdiction and various state
     and foreign jurisdictions. The Company is no longer subject to U.S. Federal
     or state income tax  examinations by tax authorities for tax years prior to
     2003.
<PAGE>


7.   Interest Rate Swap

     In September 2007, the Company entered into an interest rate swap agreement
     associated with a $6,000,000 variable rate loan with principal and interest
     payments due through  August  2012.  At  September  30, 2007,  the notional
     principal  amount totaled  $6,000,000.  This instrument was utilized by the
     Company to minimize significant unplanned fluctuations in earnings and cash
     flows caused by interest rate  volatility.  The Company did not adopt hedge
     accounting  under the provision of FASB  Statement No 133,  Accounting  for
     Derivative Instruments and Hedging Activities,  but rather records the fair
     market value adjustments through the consolidated  statements of operations
     each period.  The  associated  fair value  adjustment  included  within the
     consolidated  statements of operations for the three and nine-months  ended
     September  30,  2007  was not  material  and is  included  within  interest
     expense.

8.   The Company's  reportable  segments are strategic  business units that have
     separate management teams and infrastructures that offer different products
     and services.

     The Company has two reportable  segments,  Hospitality and Government.  The
     Hospitality   segment  offers  integrated   solutions  to  the  hospitality
     industry.  These offerings  include  industry leading hardware and software
     applications utilized in point-of-sale,  back of store and corporate office
     applications as well as in the hotel/resort/spa  marketplace.  This segment
     also  offers  customer  support  including  field  service,   installation,
     twenty-four hour telephone support and depot repair. The Government segment
     provides  technical  expertise in the  development  of advanced  technology
     prototype  systems  primarily  for the  Department  of  Defense  and  other
     Governmental  agencies.  It provides services for operating and maintaining
     certain  U.S.  Government-owned  communication  and  test  sites,  and  for
     planning,  executing and evaluating  experiments  involving new or advanced
     radar systems. It is also involved in developing technology to track mobile
     chassis. Intersegment sales and transfers are not significant.


<PAGE>


     Information as to the Company's segments is set forth below:

                                 (in thousands)


                                  For the three months     For the nine months
                                   ended September 30,      ended September 30,
                                 ----------------------   ---------------------
                                    2007         2006         2007        2006
                                 ---------    ---------   ---------   ---------
Revenues:
     Hospitality .............   $  35,072    $  33,067   $ 101,727   $ 107,428
     Government ..............      16,505       15,467      47,558      47,046
                                 ---------    ---------   ---------   ---------
Total ........................   $  51,577    $  48,534   $ 149,285   $ 154,474
                                 =========    =========   =========   =========
Operating income(loss):
     Hospitality .............   $  (2,213)   $     213   $  (7,108)  $   4,647
     Government ..............       1,132          803       2,861       3,024
     Other ...................         (57)        --          (328)       --
                                 ---------    ---------   ---------   ---------
                                    (1,138)       1,016      (4,575)      7,671
Other income, net ............         350           62         744         437
Interest expense .............        (310)        (206)       (769)       (458)
                                 ---------    ---------   ---------   ---------
Income (loss) before provision
  for income taxes ...........   $  (1,098)   $     872   $  (4,600)  $   7,650
                                 =========    =========   =========   =========

Depreciation and amortization:
     Hospitality .............   $     829    $     835   $   2,580   $   2,531
     Government ..............          43           10          60          35
     Other ...................          88           99         275         292
                                 ---------    ---------   ---------   ---------
           Total .............   $     960    $     944   $   2,915   $   2,858
                                 =========    =========   =========   =========
Capital expenditures:
     Hospitality .............   $     366    $      70   $     943   $     766
     Government ..............          26           10          58          10
     Other ...................           8           15          48         186
                                 ---------    ---------   ---------   ---------
           Total .............   $     400    $      95   $   1,049   $     962
                                 =========    =========   =========   =========

Revenues by geographic area:
     United States ...........   $  44,464    $  41,523   $ 127,968   $ 134,694
     Other Countries .........       7,113        7,011      21,317      19,780
                                 ---------    ---------   ---------   ---------
           Total .............   $  51,577    $  48,534   $ 149,285   $ 154,474
                                 =========    =========   =========   =========


     The following table represents identifiable assets by business segment:

                                               (in thousands)
                                        September 30,      December 31,
                                           2007               2006
                                         --------           --------
Identifiable assets:
    Hospitality ................         $119,584           $123,958
    Government .................           11,230             10,898
    Other ......................            9,709              7,940
                                         --------           --------
Total ..........................         $140,523           $142,796
                                         ========           ========
<PAGE>


     The following table presents  identifiable  assets by geographic area based
on the location of the asset:

                                                         (in thousands)
                                                 September 30,      December 31,
                                                    2007                 2006
                                                 ----------         ------------

           United States .................       $  127,570          $  135,337
           Other Countries ...............           12,953               7,459
                                                 ----------          ----------
                  Total                          $  140,523          $  142,796
                                                 ==========          ==========


     The following table represents Goodwill by business segment:

                                                            (in thousands)
                                                 September 30,      December 31,
                                                     2007               2006
                                                 -------------      ------------

           Hospitality ...................       $   26,171          $   25,138
           Government ....................              596                 596
                                                 ----------          ----------
                  Total                          $   26,767          $   25,734
                                                 ==========          ==========


     Customers  comprising  10% or  more of the  Company's  total  revenues  are
summarized as follows:

                                        For the three months For the nine months
                                         ended September 30, ended September 30,
                                        -------------------  ------------------
                                           2007       2006      2007       2006
                                         -------    -------    -------    ------

Restaurant Segment:
     McDonald's Corporation ........        24%        26%        25%        26%
     Yum! Brands, Inc. .............        16%        15%        14%        12%
Government Segment:
     Department of Defense .........        32%        32%        32%        30%
All Others .........................        28%        27%        29%        32%
                                           ---        ---        ---        ---
                                           100%       100%       100%       100%
                                           ===        ===        ===        ===


<PAGE>


Item 2: Management's  Discussion and Analysis of Financial Condition and Results
of Operations

Forward-Looking Statement

     This document contains  "forward-looking  statements" within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities  Exchange Act of 1934.  Any  statements  in this document that do not
describe  historical  facts  are  forward-looking  statements.   Forward-looking
statements in this document (including  forward-looking statements regarding the
continued  health of the Hospitality  industry,  future  information  technology
outsourcing opportunities,  continued funding by the U.S. Government relating to
the Company's logistics management contracts, the impact of current world events
on our results of operations,  the effects of inflation on our margins,  and the
effects of interest  rate and foreign  currency  fluctuations  on our results of
operations)  are made  pursuant  to the safe  harbor  provisions  of the Private
Securities  Litigation  Reform Act of 1995.  When we use words such as "intend,"
"anticipate,"  "believe," "estimate," "plan," "will," or "expect", we are making
forward-looking  statements.  We believe that the assumptions  and  expectations
reflected  in  such   forward-looking   statements  are  reasonable,   based  on
information  available to us on the date hereof,  but we cannot  assure you that
these  assumptions and  expectations  will prove to have been correct or that we
will take any  action  that we  presently  may be  planning.  We have  disclosed
certain  important  factors that could cause our actual future results to differ
materially  from our current  expectation,  including a decline in the volume of
purchases  made by one or a group of our major  customers;  risks in  technology
development  and  commercialization;  risks of downturns in economic  conditions
generally,   and  in  the  quick-service   sector  of  the  hospitality   market
specifically;  risks associated with government contracts; risks associated with
competition  and  competitive  pricing  pressures;  and risks related to foreign
operations.  Forward-looking  statements made in connection with this report are
necessarily  qualified by these  factors.  We are not  undertaking  to update or
revise  publicly any  forward-looking  statement if we obtain new information or
upon the occurrence of future events or otherwise.

Overview

     PAR is a  leading  provider  of  technology  systems  for  the  restaurant,
hotel/resort,  hospitality and specialty retail  industries.  PAR continues as a
leader in supplying information technology outsourcing and applied technology to
the Federal Government.

     The Company's hospitality  technology products are used in several vertical
markets  in a  variety  of  applications  by  numerous  customers.  The  Company
encounters  competition in all of its markets  (restaurants,  hotels,  theaters,
specialty retail,  etc.) and competes  primarily on the basis of product design,
features/functions,  product  quality/reliability,  price,  customer service and
delivery capability. Recent trends among hospitality organizations has been to
<PAGE>


consolidate  their lists of  approved  vendors to  companies  that have a global
capability,  can achieve  high  quality and delivery  standards,  have  multiple
product offerings,  R&D capability,  and are competitive with their pricing. PAR
is  confident  that its global  presence as a  technology  provider is a crucial
competitive  advantage as the Company  provides  innovative  products/solutions,
with a significant  global delivery  capability to its  multinational  customers
like McDonald's, Yum! Brands and Mandarin Oriental Hotel Group.

     In the fourth quarter of 2006 PAR acquired the assets of SIVA  Corporation,
a privately  held  hospitality  software  company and a cutting edge provider of
web-based   service  oriented   architected   software   applications  to  large
hospitality  organizations  in  table-service  dining  and theme  park  resorts.
Several  organizations  in  hospitality  technology  believe  that the  value in
restaurant technology occurs at the point-of-sale. PAR understands fully that to
successfully run an enterprise business, a wide range of operational information
is  necessary--and  that  information has high strategic value to the individual
stores,  managers,  and  corporate  employees  beyond just  accounting  and cash
management. Par-Siva's applications collect data at the site and then deliver it
to wherever it is required throughout the organization--not as an add-on module,
but as an integral component of every application's design.  Today's hospitality
organizations  are  integrated  and  connected  like  never  before.  Par-Siva's
offering was designed  from the ground up to utilize the  operational  knowledge
and experience PAR has in hospitality and specifically  restaurants.  Par-Siva's
applications  automate  core  restaurant  processes  such as order  entry,  food
preparation,  inventory  control,  and labor  management.  The  applications can
deliver action prompts and performance  scorecards.  From tracking to monitoring
equipment performance, Par-Siva's offerings support operations.

     PAR's  go-forward  strategy  is to provide  totally  integrated  technology
systems,   professional  services  and  high  level  lifecycle  support  in  the
industries in which it competes. The Company continues to focus its research and
development efforts on developing new technical products (software and hardware)
that meet and exceed our customers'  needs and have high probability for broader
market appeal and success.  PAR focuses upon  efficiency in its  operations  and
controlling costs.

     PAR operates  two  wholly-owned  subsidiaries  in the  Government  business
segment, PAR Government Systems Corporation (PGSC) and Rome Research Corporation
(RRC). As a long-standing Government contractor, PAR designs advanced technology
systems for the U.S. Department of Defense and other U.S. Governmental agencies.
Additionally,  PAR provides  information  technology and communications  support
services  to  the  U.S.  Navy,  U.S.  Air  Force  and  U.S.  Army.  The  Company
concentrates  its  computer-based  system design  capabilities on providing high
quality technical expertise and services,  ranging from experimental  studies to

<PAGE>

advanced operational systems,  within a variety of areas of research,  including
radar, image and signal processing,  logistic management systems, and geospatial
services  and  products.  The Company  will  continue to execute its strategy of
leveraging  its  core  technical   capabilities  and  performance  into  related
technical  areas  and an  expanding  customer  base.  The  Company  will seek to
accelerate this growth through strategic acquisitions of businesses that broaden
the Company's technology and/or business base.

     PAR's future business plan is to continue to expand the Company's  customer
base and solidify its leading position in the industries to which it markets by:

     o Developing integrated solutions

     o Continuing to grow global presence in growth markets

     o Concentrating on customer needs

     o Encouraging and rewarding entrepreneurial corporate attitude and spirit

     o Fostering a mindset of controlling cost

     o Pursuing strategic acquisitions

Summary

     The Company  believes  it can  continue  to be  successful  in its two core
business segments -Hospitality and Government.  The Company's focus and industry
expertise  will  enable  this to happen.  PAR will  continue  its three  pronged
investment  initiative for the remainder of 2007 in these particular  areas: the
continued  development  of the newly  acquired SIVA software  platform for table
service and quick serve restaurant chains; increasing the Company's distribution
channel for hospitality  markets;  and investing in the  international  business
infrastructure,  in particular in the Asia-Pacific Rim region.  The Company will
benefit from its  efficient  supply chain and economies of scale as it leverages
suppliers and  distribution  operations.  PAR remains  committed to streamlining
operations  and  improving  return on  invested  capital  through  a variety  of
initiatives.

Results of Operations -- Three Months Ended September 30, 2007 Compared to Three
Months Ended September 30, 2006

     The  Company  reported  revenues of $51.6  million  for the  quarter  ended
September 30, 2007,  an increase of 6% from the $48.5  million  reported for the
quarter ended  September 30, 2006.  The Company's net loss for the quarter ended
September 30, 2007 was $862,000, or $.06 diluted loss per share, compared to net
income of  $550,000  and $.04  diluted  income per share for the same  period in
2006.

     Product revenues from the Company's  Hospitality segment were $18.1 million
for the quarter  ended  September 30, 2007, an increase of less than 1% from the
$18.0  million  recorded in 2006.  This  increase was due to 1%  improvement  in
domestic product sales primarily due to Yum! Brands. Domestic sales continued to
be  impacted  by a continued  delay in  hardware  orders  from a major  customer
pending the release of that customer's new third party  software.  This increase
in  domestic  revenue  was  partially  offset by a 1% decline  in  international
product sales. This decrease was due to the timing of restaurant customer orders
in Asia partially offset by a growth in sales to Canada.
<PAGE>

     Customer service  revenues are also generated by the Company's  Hospitality
segment.  The  Company's  service  offerings  include   installation,   software
maintenance,  training, twenty-four hour help desk support and various depot and
on-site  service  options.  Customer  service  revenues were $17 million for the
quarter ended September 30, 2007, a 13% increase from $15.1 million reported for
the same period in 2006.  The growth is primarily  related to the award of a new
service contract with a major customer in October of 2006.

     Contract revenues from the Company's  Government segment were $16.5 million
for the quarter ended September 30, 2007, an increase of 7% when compared to the
$15.5 million  recorded in the same period in 2006.  This increase was primarily
due to the start of a new  contract in the  information  technology  outsourcing
area. These outsourcing operations provided by the Company directly support U.S.
Navy,  Air Force and Army  operations  as they seek to  convert  their  military
information technology  communications facilities into contractor-run operations
and to meet new requirements with contractor support.

     Product  margins for the quarter  ended  September  30, 2007 were 40.9%,  a
decrease of 140 basis points from the 42.3% for the quarter ended  September 30,
2006. This decrease in margins was primarily  attributable  to hardware  product
mix partially  offset by an increase in software  revenue to both restaurant and
resort and spa customers.

     Customer  service  margins were 22.2% for the quarter  ended  September 30,
2007 a decrease  of 230 basis  points  compared  to 24.5% for the same period in
2006.  Service margins  declined  primarily to the obsolescence of service parts
for a  discontinued  product line.  This was partially  offset by an increase in
software maintenance margins due to increased revenue in this area.

     Contract  margins were 7.6% for the quarter  ended  September  30, 2007, an
increase of 200 basis points  compared to 5.6% for the same period in 2006. This
increase was primarily due to a one time favorable adjustment  associated with a
contractual  claim on a fixed price contact.  This was partially offset by start
up costs on a new Information Technology outsourcing contract with the Navy. The
most  significant  components of contract  costs in 2007 and 2006 were labor and
fringe  benefits.  For 2007, labor and fringe benefits were $11.3 million or 74%
of contract  costs  compared to $11.4  million or 78% of contract  costs for the
same period in 2006.
<PAGE>

     Selling,  general and administrative  expenses are virtually all related to
the Company's Hospitality segment.  Selling, general and administrative expenses
for the quarter ended  September  30, 2007 were $8.6 million,  an increase of 4%
from the $8.2 million for the same period in 2006.  This  increase was primarily
due to a rise  in  sales  and  marketing  expenses  associated  with  restaurant
products as the Company is investing in its international  infrastructure and in
the expansion of its dealer channel. The increase is also due to higher bad debt
expense  in 2007  versus  2006.  This  was  partially  offset  by start up costs
incurred in 2006 in  anticipation  of a new service  contract  with a restaurant
customer that did not recur in 2007.

     Research  and  development  expenses  relate  primarily  to  the  Company's
Hospitality segment. Research and development expenses were $4.6 million for the
quarter  ended  September  30,  2007,  an increase of 75% from the $2.6  million
recorded in 2006.  The  increase was  primarily  attributable  to the  Company's
continued research and development in its next generation  software products for
its restaurant customers.  The platform for this next generation of products was
acquired from SIVA Corporation in the fourth quarter of 2006.

     Amortization of identifiable intangible assets was $397,000 for the quarter
ended  September  30,  2007  compared  to  $307,000  for 2006.  The  increase is
primarily  due to the  amortization  of  intangible  assets  acquired  from SIVA
Corporation in the fourth quarter of 2006.

     Other income,  net, was $350,000 for the quarter  ended  September 30, 2007
compared to $62,000 for the same period in 2006. Other income primarily includes
rental income and foreign currency gains and losses.  This increase is primarily
due to higher  rental income in 2007 compared to 2006 and an increase in foreign
currency gains in 2007 versus 2006.

     Interest expense  represents  interest charged on the Company's  short-term
borrowing  requirements from banks and from long-term debt. Interest expense was
$310,000  for the quarter  ended  September  30, 2007 as compared to $206,000 in
2006.  The increase  was due to a $6 million term loan in the fourth  quarter of
2006 to finance the SIVA acquisition.  In addition, the Company's borrowing rate
increased in 2007  compared to 2006.  This is partially  offset by lower average
borrowings in 2007 under the Company's  lines of credit with banks when compared
to 2006.

     For the quarter ended  September 30, 2007, the Company's  effective  income
tax rate was 21.5%, compared to 36.9% in 2006. The decrease is due to the impact
of state income taxes and non-deductible expenses on a projected pretax loss for
2007 versus pretax income for 2006.  Also  contributing  to this decrease is the
impact of foreign  capital  taxes,  non-deductible  foreign  losses and  reduced
export sales benefits claimed on the 2006 tax return.
<PAGE>


Results of Operations  -- Nine Months Ended  September 30, 2007 Compared to Nine
Months Ended September 30, 2006

     The Company  reported  revenues of $149.3 million for the nine months ended
September  30, 2007, a decrease of 3% from the $154.5  million  reported for the
nine months ended September 30, 2006. The Company's net loss for the nine months
ended  September  30, 2007 was $3.2  million,  or $.22  diluted  loss per share,
compared to net income of $4.9 million and $.33 diluted income per share for the
same period in 2006.

     Product revenues from the Company's  Hospitality segment were $53.1 million
for the nine months ended  September  30, 2007, a decrease of 17% from the $63.7
million  recorded in 2006.  This decrease was due to an $11.5 million decline in
domestic  product sales  primarily due to a continued  delay in hardware  orders
from a major  customer  pending the release of that  customer's  new third party
software.  The decline was also due to the Company's delay in replacing hardware
and software business associated with last year's orders from two new customers.
This drop in domestic  revenue was  partially  offset by a $900,000  increase in
international  product sales. This increase was the result of growth in sales to
the Company's restaurant customers in Asia and Canada.

     Customer service  revenues are also generated by the Company's  Hospitality
segment.  The  Company's  service  offerings  include   installation,   software
maintenance,  training, twenty-four hour help desk support and various depot and
on-site service  options.  Customer  service revenues were $48.6 million for the
nine months  ended  September  30,  2007,  an 11%  increase  from $43.7  million
reported  for the same period in 2006.  The growth is  primarily  related to the
award of a new service  contract with a major customer in October of 2006.  Also
contributing to the growth was an increase in software maintenance contracts.

     Contract revenues from the Company's  Government segment were $47.6 million
for the nine months ended September 30, 2007, an increase of 1% when compared to
the $47 million  recorded in the same period in 2006.  This  increase was due to
the  timing  of new  awards  in the  information  technology  outsourcing  area,
partially offset by the completion of some older contracts.

     Product  margins for the nine months ended September 30, 2007 were 40.3%, a
decrease of 280 basis points from the 43.1% for the nine months ended  September
30, 2006. This decrease in margins was primarily  attributable to lower software
revenue in 2007 when  compared to 2006 and to  unfavorable  absorption  of fixed
manufacturing costs as the result of a decline in production volume.
<PAGE>

     Customer service margins were 23.3% for the nine months ended September 30,
2007,  a decrease of 140 basis  points  compared to 24.7% for the same period in
2006. This decline is due to lower than planned installation revenue as a result
of the decrease in product  sales and the  obsolescence  of service  parts for a
discontinued  product line. This was partially offset by an increase in software
maintenance.

     Contract  margins were 6.5% for the nine months ended September 30, 2007, a
decline of 30 basis points versus 6.8% for the same period in 2006. The decrease
was  due  to a  favorable  cost  share  adjustment  on the  Company's  Logistics
Management program in 2006. The decrease was also attributable to start up costs
incurred on a new  Information  Technology  outsourcing  contract with the Navy.
Partially  offsetting  these  declines  was  a  one  time  favorable  adjustment
associated  with a  contractual  claim  on a  fixed  price  contract.  The  most
significant  components of contract costs in 2007 and 2006 were labor and fringe
benefits.  For 2007,  labor and fringe  benefits  were  $35.4  million or 79% of
contract  costs  compared to $34.2 million or 78% of contract costs for the same
period in 2006.

     Selling,  general and administrative  expenses are virtually all related to
the Company's Hospitality segment.  Selling, general and administrative expenses
for the nine months ended September 30, 2007 were $26.5 million,  an increase of
8% from the $24.5 million for the same period in 2006.  This increase was due to
a rise in sales and marketing  expenses  associated with restaurant  products as
the  Company  is  investing  in  its  international  infrastructure  and  in the
expansion of its dealer channel. The increase was also due to a rise in bad debt
expense and stock based compensation expense.

     Research  and  development  expenses  relate  primarily  to  the  Company's
Hospitality  segment.  Research and development  expenses were $12.8 million for
the nine  months  ended  September  30,  2007,  an increase of 53% from the $8.3
million  recorded  in 2006.  The  increase  was  primarily  attributable  to the
Company's  continued  research and development in its next  generation  software
products for its restaurant customers.  The platform for this next generation of
products was acquired from SIVA Corporation in the fourth quarter of 2006.

     Amortization  of  identifiable  intangible  assets was $1.2 million for the
nine months ended September 30, 2007 compared to $922,000 for 2006. The increase
is primarily due to the  amortization  of intangible  assets  acquired from SIVA
Corporation in the fourth quarter of 2006.

     Other  income,  net, was $744,000 for the nine months ended  September  30,
2007  compared to $437,000 for the same period in 2006.  Other income  primarily
includes rental income and foreign  currency gains and losses.  This increase is
primarily due to higher foreign currency gains in 2007 compared to 2006.
<PAGE>

     Interest expense  represents  interest charged on the Company's  short-term
borrowing  requirements from banks and from long-term debt. Interest expense was
$769,000 for the nine months ended September 30, 2007 as compared to $458,000 in
2006.  This  increase is primarily due to a $6 million term loan executed in the
fourth quarter of 2006 to finance the SIVA acquisition.


     For the nine months ended  September  30,  2007,  the  Company's  effective
income tax rate was 30.6%, compared to 35.9% in 2006. The decrease is due to the
impact of state income taxes and  non-deductible  expenses on a projected pretax
loss for 2007 versus pretax income for 2006. Also  contributing to this decrease
is the  impact of  foreign  capital  taxes,  non-deductible  foreign  losses and
reduced export sales benefits claimed on the 2006 tax return.


Liquidity and Capital Resources

     The  Company's  primary  sources  of  liquidity  have  been  cash flow from
operations and lines of credit with various  banks.  Cash provided by operations
was $3.9 million for the nine months ended  September  30, 2007 compared to cash
used of $8.3 million for 2006. In 2007, cash was generated through collection of
accounts receivables. This was partially offset by a growth in inventory and the
timing of payments to vendors. In 2006, cash flow was negatively impacted by the
timing of customer receipts and by inventory purchases in anticipation of future
demand.

     Cash used in  investing  activities  was $1.8  million  for the nine months
ended  September  30, 2007 versus $1.4  million for the same period in 2006.  In
2007, capital  expenditures were $1 million and were primarily for manufacturing
and research and development  equipment.  Capitalized software costs relating to
software  development of Hospitality  segment products were $788,000 in 2007. In
2006, capital  expenditures were $962,000 and were principally for manufacturing
and information  technology equipment and software for internal use. Capitalized
software costs relating to software  development of Hospitality segment products
were $399,000 in 2006.

     Cash used in  financing  activities  was $2.2  million  for the nine months
ended  September 30, 2007 versus cash provided of $6.7 million in 2006. In 2007,
the Company reduced its short-term  borrowings by $2.3 million and decreased its
long-term debt by $72,000. The Company also benefited $119,000 from the exercise
of employee stock options.  In 2006, the Company  increased its short-term  bank
borrowings by $6.4 million and benefited  $160,000 from the exercise of employee
stock options.
<PAGE>

     The Company has an aggregate  availability of $20,000,000 in unsecured bank
lines of  credit.  One line  totaling  $12,500,000  bears  interest  at the bank
borrowing  rate (7.3% at  September  30,  2007).  The second line of  $7,500,000
allows the  Company,  at its option,  to borrow funds at the LIBOR rate plus the
applicable  interest  rate spread or at the bank's  prime  lending rate (7.4% at
September 30, 2007). In June, 2007 these credit agreements were amended to waive
the  existing  leverage and fixed charge  coverage  ratios for the  remainder of
2007.  Under the amendment,  the Company is required to meet an EBITDA  covenant
for the balance of 2007.  These lines  expire in April 2009.  The Company was in
compliance  with its EBITDA  covenant on September  30, 2007.  At September  30,
2007, there was $5,421,000  outstanding  under these lines. The weighted average
interest rate paid by the Company during 2007 was 6.6% and 6.7% during 2006.

     In 2006,  the Company  borrowed  $6,000,000  under an  unsecured  term loan
agreement  with a bank in  connection  with  the  asset  acquisition  from  SIVA
Corporation.  The loan provides for interest only payments in the first year and
escalating principal payments through 2012. The loan bears interest at the LIBOR
rate plus the  applicable  interest  rate spread (7.3 % at September  30, 2007).

     In September 2007, the Company entered into an interest rate swap agreement
associated  with a $6,000,000  variable  rate loan with  principal  and interest
payments due through August 2012. At September 30, 2007, the notional  principal
amount  totaled  $6,000,000.  This  instrument  was  utilized  by the Company to
minimize significant unplanned fluctuations in earnings and cash flows caused by
interest rate  volatility.  The Company did not adopt hedge accounting under the
provision of FASB Statement No 133,  Accounting for Derivative  Instruments  and
Hedging Activities, but rather records the fair market value adjustments through
the consolidated statements of operations each period. The associated fair value
adjustment  included  within the  consolidated  statements of operations for the
three and nine-months  ended September 30, 2007 was not material and is included
within interest expense.

     The  Company  has a  $1,877,000  mortgage  collateralized  by certain  real
estate.  The annual mortgage payment  including  interest totals  $226,000.  The
mortgage bears interest at a fixed rate of 7% and matures in 2010.

     During  fiscal  year  2007,  the  Company   anticipates  that  its  capital
requirements  will be less than $2 million.  The Company does not usually  enter
into long term  contracts  with its major  Hospitality  segment  customers.  The
Company  commits  to  purchasing   inventory  from  its  suppliers  based  on  a
combin-ation of internal  forecasts and the actual orders from  customers.  This
process, along with good relations with suppliers, minimizes the working capital
investment  required  by the  Company.  Although  the  Company  lists  two major
customers,  McDonald's  and Yum!  Brands,  it sells to  hundreds  of  individual
franchisees of these corporations, each of which is individually responsible for
its own debts. These broadly made sales  substantially  reduce the impact on the
Company's  liquidity  if one  individual  franchisee  reduces  the volume of its
purchases  from the  Company in a given  year.  The  Company,  based on internal
forecasts,  believes  its  existing  cash,  line of  credit  facilities  and its
anticipated operating cash flow will be sufficient to meet its cash requirements
through at least the next twelve months.  However,  the Company may be required,
<PAGE>


or could elect,  to seek  additional  funding prior to that time.  The Company's
future capital  requirements  will depend on many factors  including its rate of
revenue growth, the timing and extent of spending to support product development
efforts,  expansion of sales and marketing,  the timing of  introductions of new
products and  enhancements to existing  products,  and market  acceptance of its
products.  The Company  cannot assure that  additional  equity or debt financing
will be  available  on  acceptable  terms or at all.  The  Company's  sources of
liquidity  beyond  twelve  months,  in  management's  opinion,  will be its cash
balances on hand at that time,  funds  provided by operations,  funds  available
through  its lines of credit and the  long-term  credit  facilities  that it can
arrange.

Critical Accounting Policies

     The  Company's   consolidated   financial   statements  are  based  on  the
application  of U.S.  generally  accepted  accounting  principles  (GAAP).  GAAP
requires  the  use  of  estimates,   assumptions,   judgments   and   subjective
interpretations  of  accounting  principles  that have an impact on the  assets,
liabilities,  revenue and expense amounts reported. The Company believes its use
of  estimates  and  underlying  accounting  assumptions  adhere  to GAAP and are
consistently   applied.   Valuations   based  on  estimates   are  reviewed  for
reasonableness  and  adequacy on a  consistent  basis  throughout  the  Company.
Primary areas where  financial  information of the Company is subject to the use
of  estimates,  assumptions  and the  application  of judgment  include  revenue
recognition,  accounts  receivable,  inventories,  intangible assets,  taxes and
equity-based compensation.

Revenue Recognition Policy

     The Company recognizes  revenue generated by the Hospitality  segment using
the  guidance  from SEC  Staff  Accounting  Bulletin  (SAB)  No.  104,  "Revenue
Recognition" and the AICPA Statement of Position (SOP) 97-2,  "Software  Revenue
Recognition."  Product  revenues  consist  of  sales of the  Company's  standard
point-of-sale  and  property  management  systems  of the  Hospitality  segment.
Product  revenues  include both  hardware and software  sales.  The Company also
records service  revenues  relating to its standard  point-of-sale  and property
management systems of the Hospitality segment.

     Hardware

     Revenue  recognition on hardware sales occurs upon delivery to the customer
site (or when  shipped for systems  that are not  installed  by the  Company) as
under SAB 104,  persuasive  evidence  of an  arrangement  exists,  delivery  has
occurred,  the price is fixed or determinable,  and collectibility is reasonably
assured.
<PAGE>

     Software

     Revenue recognition on software sales generally occurs upon delivery to the
customer  site (or when  shipped  for  systems  that  are not  installed  by the
Company)  as under SOP  97-2,  persuasive  evidence  of an  arrangement  exists,
delivery has occurred, the price is fixed or determinable, and collectibility is
reasonably assured.  For software sales where the Company is the sole party that
has the  proprietary  knowledge to install the  software,  revenue is recognized
upon installation and when the system is ready to go live.

     Service

     Service revenue  consists of installation  and training  services,  support
maintenance,  and field and depot  repair.  Installation  and  training  service
revenue are based upon standard  hourly/daily rates and revenue is recognized as
the services are performed.  Support  maintenance and field and depot repair are
provided  to  customers  either  on a  time  and  materials  basis  or  under  a
maintenance  contract.  Services  provided  on a time and  materials  basis  are
recognized as the services are  performed.  Service  revenues  from  maintenance
contracts are recognized ratably over the underlying contract period.

     The  individual   product  and  service  offerings  that  are  included  in
arrangements  with our customers  are  identified  and priced  separately to the
customer based upon the stand alone price for each individual product or service
sold in the arrangement irrespective of the combination of products and services
which are included in a particular arrangement. As such, the units of accounting
are based on each individual  product and service sold, and revenue is allocated
to each  element  based on vendor  specific  objective  evidence  (VSOE) of fair
value.  VSOE of fair value for each  individual  product and service is based on
separate individual prices of these products and services.  The sales price used
to  establish  fair  value is the  sales  price of the  element  when it is sold
individually  in a  separate  arrangement  and not as a  separate  element  in a
multiple element arrangement.

     Contracts

     The Company recognizes revenue in its Government segment using the guidance
from SEC Staff Accounting Bulletin No. 104, Revenue  Recognition.  The Company's
contract  revenues  generated by the Government  segment  result  primarily from
contract services performed for the U.S. Government under a variety of cost-plus
fixed fee,  time-and-material  and fixed-price  contracts.  Revenue on cost-plus
fixed fee  contracts  is  recognized  based on  allowable  costs for labor hours
delivered,  as well as other allowable costs plus the applicable fee. Revenue on
time and material  contracts is recognized by  multiplying  the number of direct
labor hours delivered in the performance of the contract by the contract billing
rates and adding  other  direct  costs as  incurred.  Revenue  from  fixed-price
contracts is  recognized  as labor hours are delivered  which  approximates  the
straight-line basis of the life of the contract.  The Company's obligation under

<PAGE>

these  contracts  is to  provide  labor  hours to conduct  research  or to staff
facilities with no other  deliverables or performance  obligations.  Anticipated
losses on all contracts are recorded in full when identified.  Unbilled accounts
receivable  are stated in the  Company's  consolidated  financial  statements at
their estimated realizable value.  Contract costs,  including indirect expenses,
are subject to audit and adjustment through negotiations between the Company and
U.S. Government representatives.

Accounts Receivable-Allowance for Doubtful Accounts

     Allowances for doubtful  accounts are based on estimates of probable losses
related  to  accounts  receivable  balances.  The  establishment  of  allowances
requires  the use of  judgment  and  assumptions  regarding  probable  losses on
receivable  balances.  We continuously monitor collections and payments from our
customers  and maintain a provision  for  estimated  credit  losses based on our
historical  experience and any specific customer  collection issues that we have
identified.   While  such  credit  losses  have  historically  been  within  our
expectations and appropriate reserves have been established, we cannot guarantee
that we will  continue  to  experience  the same  credit loss rates that we have
experienced in the past. Thus, if the financial  condition of our customers were
to  deteriorate,  our actual  losses may exceed our  estimates,  and  additional
allowances would be required.

Inventories

     The Company's  inventories are valued at the lower of cost or market,  with
cost determined using the first-in,  first-out  (FIFO) method.  The Company uses
certain  estimates and judgments and considers several factors including product
demand and changes in technology to provide for excess and obsolescence reserves
to properly value inventory.

Capitalized Software Development Costs

     The  Company  capitalizes  certain  costs  related  to the  development  of
computer  software used in its  Hospitality  segment under the  requirements  of
Statement of Financial  Accounting Standards No. 86, Accounting for the Costs of
Computer  Software  to  be  Sold,  Leased,  or  Otherwise   Marketed.   Software
development costs incurred prior to establishing  technological  feasibility are
charged to operations and included in research and development  costs.  Software
development  costs incurred after  establishing  technological  feasibility  are
capitalized  and amortized over the estimated  economic life when the product is
available for general release to customers.
<PAGE>

Goodwill

     Following  Financial  Accounting  Standards  Board issuance of Statement of
Financial  Accounting  Standards No. 142, Goodwill and Other Intangible  Assets,
(SFAS 142),  the Company  tests all goodwill for  impairment  annually,  or more
frequently  if  circumstances  indicate  potential  impairment.  The Company has
elected to  annually  test for  impairment  in the fourth  quarter of its fiscal
year.

Taxes

     The  Company  has  significant  amounts of  deferred  tax  assets  that are
reviewed for recoverability and valued  accordingly.  These assets are evaluated
by using  estimates  of future  taxable  income and the  impact of tax  planning
strategies.  Valuations  related to tax  accruals  and assets can be impacted by
changes to tax codes, changes in statutory tax rates and the Company's estimates
of its future taxable income levels.

Equity-Based Compensation

     The Company accounts for equity based  compensation by recognizing  expense
over the vesting period for any non-vested  stock option awards  granted.  Stock
option  grants  are  valued by using a  Black-Scholes  method at the date of the
grant.  There are assumptions and estimates made by management which go into the
valuation  of the options  granted,  such as  volatility,  vesting  period,  and
forfeiture  rate.  The Company  recognizes  expense on options  granted  using a
ratable  method over the vesting  period.  Restricted  stock grants are expensed
over the vesting period, which is determined at the date of the grant.

Interest Rate Swap

     The Company  utilizes an interest  rate swap  agreement  associated  with a
portion of their variable rate debt. The Company did not adopt hedge  accounting
under  the  provision  of FASB  Statement  No  133,  Accounting  for  Derivative
Instruments  and Hedging  Activities,  but rather  records the fair market value
adjustments through the consolidated statements of operations each period.

Recent Accounting Pronouncements

     In September 2006, the FASB issued SFAS No. 157, "Fair Value  Measurements"
("SFAS 157"), which provides guidance for measuring the fair value of assets and
liabilities,   as  well  as  requires  expanded  disclosures  about  fair  value
measurements.  SFAS 157 indicates that fair value should be determined  based on
the  assumptions  marketplace  participants  would use in  pricing  the asset or
liability,  and provides  additional  guidelines to consider in determining  the
market-based  measurement.  The  Company  will be  required to adopt SFAS 157 on
January 1, 2008. The Company is currently evaluating the impact of adopting SFAS
157 on its consolidated financial statements.

     In February  2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial  Liabilities"  ("SFAS 159"). SFAS 159 permits all
entities to choose to measure eligible items at fair value at specified election
dates.  SFAS 159 is  effective as of the  beginning of an entity's  first fiscal
year that begins after November 15, 2007. The Company is currently assessing the
impact of adopting SFAS 159 on its consolidated financial statements.
<PAGE>

Item 3. Quantitative and Qualitative Disclosures about Market Risk

INFLATION

     Inflation  had little effect on revenues and related costs during the first
nine months of 2007.  Management  anticipates that margins will be maintained at
acceptable levels to minimize the affects of inflation, if any.

INTEREST RATES

     As of  September  30,  2007,  the  Company  has $5.4  million  in  variable
long-term debt and $6 million in variable  short-term debt. The Company believes
that an adverse  change in interest  rates of 100 basis  points would not have a
material impact on our business,  financial condition,  results of operations or
cash flows.

FOREIGN CURRENCY

     The Company's  primary exposures relate to certain  non-dollar  denominated
sales and operating  expenses in Europe and Asia.  These primary  currencies are
the Euro, the Australian  dollar and the Singapore dollar.  Management  believes
that foreign currency  fluctuations  should not have a significant impact on our
business,  financial conditions,  results of operations or cash flows due to the
low volume of business affected by foreign currencies.

Item 4. Controls and Procedures

     (a) Evaluation of Disclosure Controls and Procedures.

     As of the  end of the  period  covered  by  this  report,  our  management,
including our Chief Executive Officer and Chief Financial  Officer,  carried out
an evaluation of the  effectiveness  of the Company' s "disclosure  controls and
procedures"  (as defined in the Securities  Exchange Act of 1934 Rules 13a-15(e)
and 15d-15(e)) of the Company. These officers have concluded that our disclosure
controls and  procedures  are  effective.  As such, we believe that all material
information  relating  to us and our  consolidated  subsidiaries  required to be
disclosed in our periodic  filings with the Securities  and Exchange  Commission
(i) is recorded,  processed,  summarized  and reported  within the required time
period,  and (ii) is accumulated and  communicated to the Company's  management,
including  our  Chief  Executive  Officer  and  Chief  Financial   Officer,   as
appropriate,  to allow  timely  decisions  regarding  required  disclosure.
<PAGE>

     b)  Changes in Internal Controls.

     There was no change  in the  Company's  internal  controls  over  financial
reporting,  as defined in Rule  13a-15(f) of the Exchange Act during the quarter
ended September 30, 2007 that has materially  affected,  or is reasonably likely
to materially affect, such internal controls over financial reporting.

                          PART II - OTHER INFORMATION

Item 1A. Risk Factors

     The Company is exposed to certain risk  factors that may effect  operations
and/or  financial  results.  The  significant  factors  known to the Company are
described in the Company's most recently filed Annual Report on Form 10-K. There
have been no material  changes from the risk factors as previously  disclosed in
the Company's Annual Report on Form 10-K.

Item 4. Submission of Matters to a Vote of Security Holders

     None.

Item 5. Other Information

     On July 26, 2007, PAR Technology Corporation furnished a report on Form 8-K
pursuant to Item 2.02  (Results of Operations  and Financial  Condition) of that
Form relating to its financial  information for the quarter ended June 30, 2007,
as presented  in a press  release of July 26, 2007 and  furnished  thereto as an
exhibit.

Item 6. Exhibits


                                List of Exhibits


     Exhibit No.                 Description of Instrument
     -----------                 -------------------------

       31.1                Certification of Chairman of the Board
                           and Chief Executive Officer Pursuant
                           to Section 302 of the Sarbanes-Oxley Act
                           of 2002.

       31.2                Certification of Vice President, Chief
                           Financial Officer and Treasurer Pursuant
                           to Section 302 of the Sarbanes-Oxley Act
                           of 2002.

       32.1                Certification of Chairman of the Board
                           and Chief Executive Officer and
                           Vice President, Chief Financial Officer
                           and Treasurer Pursuant to 18 U.S.C.
                           Section 1350, as Adopted Pursuant to
                           Section 906 of the Sarbanes-Oxley Act of 2002.


<PAGE>




                                   SIGNATURES




Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.











                                         PAR TECHNOLOGY CORPORATION
                                         --------------------------
                                               (Registrant)









Date:  November 9, 2007



                                         RONALD J. CASCIANO
                                         ---------------------------------
                                         Ronald J. Casciano
                                         Vice President, Chief Financial Officer
                                         and Treasurer



<PAGE>




                                  Exhibit Index




                                                                  Sequential
                                                                     Page
      Exhibit                                                       Number
      -------                                                       ------


       31.1          Certification of Chairman of the Board            E-1
                     and Chief Executive Officer Pursuant
                     to Section 302 of the Sarbanes-Oxley Act
                     of 2002.

       31.2          Certification of Vice President, Chief            E-2
                     Financial Officer and Treasurer Pursuant
                     to Section 302 of the Sarbanes-Oxley Act
                     of 2002.

       32.1          Certification of Chairman of the Board            E-3
                     and Chief Executive Officer and
                     Vice President, Chief Financial Officer
                     and Treasurer Pursuant to 18 U.S.C.
                     Section 1350, as Adopted Pursuant to
                     Section 906 of the Sarbanes-Oxley Act of 2002.


<PAGE>




                                  Exhibit 31.1

                           PAR TECHNOLOGY CORPORATION
                         STATEMENT OF EXECUTIVE OFFICER

I, John W. Sammon certify that:

1.   I have reviewed this report on Form 10-Q of PAR Technology Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)), for the registrant and have:

          a.   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

          b.   Designed  such  internal  control over  financial  reporting,  or
               caused such  internal  control  over  financial  reporting  to be
               designed under our supervision,  to provide reasonable  assurance
               regarding  the   reliability  of  financial   reporting  and  the
               preparation  of financial  statements  for  external  purposes in
               accordance with generally accepted accounting principles;

          c.   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluations; and

          d.   Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's  most recent fiscal  quarter and that has materially
               affected,  or is  reasonably  likely to  materially  affect,  the
               registrant's internal control over financial reporting.

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors:

          a.   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          b.   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.


Date: November 9, 2007
                                            John W. Sammon
                                            -----------------------------------
                                            John W. Sammon
                                            Chairman of the Board and
                                            Chief Executive Officer


                                       E-1
<PAGE>

                                  Exhibit 31.2

                           PAR TECHNOLOGY CORPORATION
                         STATEMENT OF EXECUTIVE OFFICER

I, Ronald J. Casciano, certify that:

1.   I have reviewed this report on Form 10-Q of PAR Technology Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)), for the registrant and have:

          a.   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

          b.   Designed  such  internal  control over  financial  reporting,  or
               caused such  internal  control  over  financial  reporting  to be
               designed under our supervision,  to provide reasonable  assurance
               regarding  the   reliability  of  financial   reporting  and  the
               preparation  of financial  statements  for  external  purposes in
               accordance with generally accepted accounting principles;

          c.   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluations; and

          d.   Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's  most recent fiscal  quarter and that has materially
               affected,  or is  reasonably  likely to  materially  affect,  the
               registrant's internal control over financial reporting.

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors:

          a.   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          b.   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.

Date: November 9, 2007
                                            Ronald J. Casciano
                                            -----------------------------------
                                            Ronald J. Casciano
                                            Vice President,
                                            Chief Financial Officer & Treasurer



                                       E-2

<PAGE>

                                  Exhibit 32.1


                           PAR TECHNOLOGY CORPORATION
                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In connection with the Quarterly Report of PAR Technology  Corporation (the
"Company") on Form 10-Q for the quarter  ended  September 30, 2007 as filed with
the Securities and Exchange  Commission on the date hereof (the  "Report"),  we,
John W.  Sammon,  Jr.  and  Ronald J.  Casciano,  Chairman  of the Board & Chief
Executive Officer and Vice President, Chief Financial Officer & Treasurer of the
Company,  certify pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906
of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:


     (1)  The Report fully  complies  with the  requirement  of section 13(a) or
          15(d) of the Securities Exchange Act of 1934, as amended; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.






John W. Sammon
------------------------------
John W. Sammon
Chairman of the Board & Chief Executive Officer
November 9, 2007

Ronald J. Casciano
------------------------------
Ronald J. Casciano
Vice President, Chief Financial Officer & Treasurer
November 9, 2007










                                       E-3